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Business News/ Companies / News/  Procedural deviations in Franklin e-voting, only 38% turnout: report
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Procedural deviations in Franklin e-voting, only 38% turnout: report

Voters in the schemes approved the winding up by a majority of over 96% in all the schemes, the report showed
  • The observer further noted that the vote was framed such that approval by simple majority is required rather than the threshold of 75% that is required in case of winding up of a company
  • The Sebi-appointed observer’s report pointed at deviations on disclosure of interest by directors, key managerial personnel and their relatives (Photo: Mint)Premium
    The Sebi-appointed observer’s report pointed at deviations on disclosure of interest by directors, key managerial personnel and their relatives (Photo: Mint)

    MUMBAI : A regulatory observer for the electronic voting on the winding up of six Franklin Templeton mutual fund schemes has criticized some aspects of the voting process.

    The report from T.S. Krishnamurthy, appointed by the Securities and Exchange Board of India (Sebi) for the e-voting, showed 115,419 votes were cast, or roughly 38% of the schemes’ 300,000-odd investors. Voters in the schemes approved the winding up by a majority of more than 96% in all the schemes, the report showed.

    According to the report, Franklin Templeton Asset Management (India) Pvt. Ltd had agreed to broadly follow the Companies Act 2013 and the Companies (Management and Administration) Rules 2014. The Act specifies one vote per fully paid up share of a company.

    “If this rule had been strictly applied, the unit-holders would have been entitled to exercise one vote per unit on the cut-off date. However, in this case, each unit-holder has been given only one vote irrespective of the number of units held as on the cut-off date," the report said.

    Mint has seen a copy of the report.

    The report further said the Franklin Templeton voting required approval by a simple majority, rather than the threshold of 75% required in case of winding up a company.

    The observer’s report also pointed at deviations on disclosure of interest by directors, key managerial personnel and their relatives, and the failure to provide an opportunity to inspect relevant documents.

    Queries emailed to Franklin Templeton remained unanswered till press time.

    Franklin Templeton froze redemptions from the six schemes on 23 April in the wake of a severe liquidity crunch. As on Wednesday, these schemes had assets of around 26,000 crore, receiving 13,789 crore till 15 January, with five out of the six schemes turning cash-positive.

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    ABOUT THE AUTHOR
    Neil Borate
    Neil heads the personal finance team at Mint. A former colleague called them 'money nerds' and that's what they are. They cover topics like mutual funds, taxation and retirement, all to improve your chances of building wealth. Neil graduated with a degree in law and economics. He passed the CFA Level I exam and began his writing career at Value Research, a mutual fund research firm in 2016. He joined the personal finance team Mint in 2019. Everyday, the Mint Money Team tackles personal finance questions such as where to invest and where to borrow, through articles, charts and reader queries. They also have a daily podcast - 'Why Not Mint Money' and an annual ranking of mutual funds - the Mint 20.
    Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
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    Published: 20 Jan 2021, 10:13 PM IST
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